Citizens' controversial $350M loan program picks up endorsements

The group—which included Sen. John Thrasher, R-Jacksonville, Rep. Bryan Nelson, R-Apopka, and former House speaker Tom Feeney—said Citizens should act “with
all due haste” to approve the so-called surplus loan program.

“Citizens, as John pointed out, is a ticking time bomb,” said
Feeney, who now leads the business group Associated Industries of Florida and
was House speaker when Citizens was created in 2002. Feeney, a major player during
the creation of the state-run insurer, now calls it “the worst run casualty and risk market
that I am aware of anywhere in the free world.”

Under the new “surplus loan” program, Citizens would take
capital from its record $6.2 billion reserves and lend it — under favorable
terms — to private insurers who agree to take over policies and keep them for
10 years.

The program could help reduce the size of Citizens by
300,000 policies, which could reduce the amount of assessment Floridians have
to pay after a once-in-a-century type hurricane. Gov. Rick Scott has championed the effort to shrink Citizens and reduce
its risk, sparking controversial and unpopular coverage changes for
policyholders. Business-friendly groups support the $350 million program.

Nelson defended the program and its rollout, saying he and
others began considering the program shortly after the last legislative session
ended in March. Nelson called the program an "window of opportunity" to help Citizens "head in the right direction."

When asked why such a worthy program was being advanced
outside of the traditional legislative review process, the chair of the
subcommittee on Insurance & Banking did not directly answer the question.

“Do we want to wait another hurricane season?” he said. “I think
this is an opportunity that we just don’t want to miss.”

Said Sean Shaw, founder of the Policyholders of Florida: "The insurance industry is clearly afraid of having this corporate welfare go through the full legislative process. This type of grandstanding and bullying should make everyone take two steps back and question exactly why these companies want to quickly dictate, rather than legislate, this major policy shift."

Insurance Consumer Advocate Robin Westcott, who warned last
month that the program was being advanced “in a hurry,” this week sent
a lengthy list of questions to board chairman Carlos Lacasa about the program.

Chief Financial Officer Jeff
Atwater said last month that Citizens needed to consider “slowing this
thing down” in order to better explain it to the public and make sure it was a
good deal.

Rep. Frank Artiles,
R-Miami, has asked for several documents in order to probe what he calls an
illegal “inside deal,” and said it was “reckless to rush the SPN program
through” without a thorough vetting.

Citizens president Barry
Gilway said the program has been reviewed by outside counsel, and that the
company would address a litany of concerns before the program is approved in a
few weeks.

Next week, Citizens board will meet to put the final touches
to the program.